Parsons Corporation purchased 75 percent ownership of Tumble Company on December 31, 20X7, for $210,000 Summarized balance sheet amounts for the companies on December 31, 20X7, prior to the purchase, were as follows Required If consolidated financial statements are prepared, determine the amounts t...

a Proprietary theory Cash and inventory 300000 80000 x 075 360000 ...

Parsons Corporation purchased 75 percent ownership of Tumble Company on December 31, 20X7, for $210,000. Summarized balance

Question:

Parsons Corporation purchased 75 percent ownership of Tumble Company on December 31, 20X7, for $210,000. Summarized amounts for the companies on December 31, 20X7, prior to the purchase, were as follows:

Required
If consolidated financial statements are prepared, determine the amounts that would be reported as cash and inventory, buildings and equipment (net), and goodwill using the following consolidation alternatives:
a. Proprietary theory.
b. Parent company theory.
c. Entity theory.
d. Current accountingpractice.

Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of... Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...